Related to the content of www.npmanagement.org. Blog posts are usually about non-profit management or the site itself.

Saturday, July 28, 2012

Considering Diversification?

Large for-profit conglomerates have used diversification as a means of flexing their capitalization muscle and hedging against risk for a long time. Over the past few years this has been seen in large to moderately sized nonprofits too, at least partially in response to seismic shifts in funding streams. Sometimes these stream shifts have been as earth shaking as those created in the New Madrid earthquake that made the Mississippi River flow backwards, and it became easy to find bargains available for acquisition. Other times it just seemed to be the best prospect for short term survival.

NPManagement.org has an article in the pipeline that will expand on the implications of these factors in the not-for-profit arena, which will provide some examples. But for now, here are a few things to keep in mind:
Are we considering the merger/acquisition because we are the best people to run the new business?
Will we be able to integrate the businesses, or will they cause us to disintegrate?
Have we been creating synergy in our own business already? If not, what makes us think we’ll be able to do so in the new, combined business?

Although NPManagement.org is technically on its summer hiatus, stay tuned because the article on this topic should be delivered soon.